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Nokia, once the biggest player, has announced its foray into the mobile phones market again. Company Chief Executive Officer Rajeev Suri has said the company was looking for partners for smartphone’s manufacturing. The Finnish firm has been the top smartphone player in the world. The company got a jolt when it turned down an offer by Google to incorporate Android operating system (OS) on their handsets , saying it would continue to use the Symbian OS for its smartphones. On the other hand, Android OS got popularity in the market , which was apparently sold to other firms such as Samsung.
Nokia, which had 40% of the handset market in 2007, fell to only 15% (at the time when the Finnish firm was sold), and only 3% in smartphones.
On the Nokia-Microsoft deal, Steve Ballmer, the then Microsoft chief executive officer, in 2013, had stated, “It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.”
For Nokia, this transaction was expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses, Ballmer added.
The company had to be sold to Microsoft on account of its weak financial position, inflicted due to falling sales. Microsoft purchased Nokia’s devices and services business for $7.2 billion in a deal except Nokia’s Chennai manufacturing plant. Microsoft kept the plant out of deal due to a tax dispute between Nokia India and income tax (I-T) department. The department froze all assets of the facility.
The I-T department demanded Rs 10,000-crore tax this year on selling Nokia India’s Chennai manufacturing plant. The matter was latter appealed in the Delhi High Court. The tax department told the court that there were more than 40,000 items, for which valuation was not known.
The case was scheduled to be heared on September 7 but Nokia requested the high court to hear the case earlier, saying it got a buyer of the facility. The court agreed to take up the matter on May 26 but on May 26, the company told the high court that it wants to withdraw its request to lift the freeze on its shuttered Chennai plant and sell it after a potential buyer has backed out.
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The court on May 26 asked Nokia India to place the valuation of the plant by consulting firm EY on its record. EY said in court on Tuesday that the plant’s valuation, assuming that the company can stay afloat, is Rs 361 crore and Rs 417 crore if it goes bankrupt. Nokia India said the buyer had offered Rs 400 crore for the plant.